Defaults by Chinese borrowers have surged to a record high since the outbreak of the coronavirus pandemic, highlighting the depth of the country’s economic downturn and the obstacles to a full recovery, reports the Financial Times. A total of 8.54 million people, most of them between the ages of 18 and 59, are officially blacklisted by authorities after missing payments on everything from home mortgages to business loans, according to local courts.
That figure, equivalent to about 1% of working-age Chinese adults, is up from 5.7 million defaulters in early 2020, as pandemic lockdowns and other restrictions hobbled economic growth and gutted household incomes.
The soaring number of defaulters will add to the difficulty of shoring up consumer confidence in China, the world’s second largest economy and a crucial source of global demand. It also throws a spotlight on the country’s lack of personal bankruptcy laws that might soften the financial and social impact of soaring debt.